Domestic Fuel

2011 was a pivotal year for the Domestic Fuel industry.

The renewal of the biodiesel tax incentive at the end of 2010 led to record production this year and a renewed optimism for the industry. Meanwhile, the ethanol industry saw the approval of E15 in newer vehicles at the beginning of the year, although it has yet to make it to the pump, and the end of 2011 means the end of the Volumetric Ethanol Excise Tax Credit and associated import tariff. 2011 was also a great year at the races, with NASCAR fueled with 15% American Ethanol.

The most popular renewable news stories on Domestic Fuel this year included:
Newt Gingrich wows IRFA Summit
Future of Ethanol Tax Policy
Renewable Energy surpasses Nuclear
Joule wins WSJ Award
Study Shows E15 OK in Older Vehicles
Royal Wedding Car Runs on E85
Wind Industry takes steps to Protect Wildlife

Traffic was up another 3.5% in 2011 on Domestic Fuel with a total of almost 325,000 unique visitors. We also now have nearly 1700 followers on Twitter (@DomesticFuel). There were over 1320 posts on Domestic Fuel this year, including 140 with audio interviews, podcasts and recorded press conferences. We covered the Iowa Renewable Fuels Summit, National Biodiesel Conference, National Ethanol Conference, Advanced Biofuels Leadership Conference, USDA and EPA Tour of REG, NASCAR STP 300 in Chicago, STP 400 in Kansas City, Iowa Corn Indy 250, Garnett Ethanol Boat Race, Fuel Ethanol Workshop and the RFA Sponsorship of the Sturgis Motorcycle Rally.

As we enter a new Domestic Fuel era, we wish all of our readers, sponsors and friends a healthy, happy, prosperous and blessed new year!

2010 was a tough year for Iowa’s biodiesel producers, but the industry roared back to life in 2011 and set a new production record.

According to the Iowa Renewable Fuels Association (IRFA), ten of Iowa’s 13 biodiesel plants operated during 2011 and produced a combined 169 million gallons. With plants restarting throughout the year, the rate of biodiesel production in December reached over 250 million gallons (annualized).

Iowa produced 48 million gallons of biodiesel in 2010. The previous record production was 85 million gallons in 2009.

“2011 has been a banner year for Iowa biodiesel,” said IRFA Executive Director Monte Shaw. “The reinstatement of the biodiesel tax credit combined with the renewable fuels standard (RFS) helped demand and Iowa was quick to respond. Yet challenges remain in front of us. Congress will once again allow the biodiesel tax credit to lapse at the end of 2011. With the RFS firmly in place, we do not expect the industry to completely shut down as it did in 2010. But the uncertainty of reinstatement will undoubtedly depress demand. Congress must act quickly in 2012 to extend the tax credit.”

ESA Renewables, (ESA), a leading turnkey solar solutions provider, has entered into separate multi-year operation and maintenance (O&M) contracts with four solar farms in North Carolina.

The four O&M agreements are with:

• -The Murphy Solar Farm, which is approximately eight acres in size and consists of 4,298 ground-mounted solar panels. The solar installation is located on the grounds of the Martins Creek Elementary School.

• -The Wingate Solar Farm, also located in Murphy, N.C. which consists of 4,340 solar panels. This solar project has been installed on a tract of land which is approximately seven acres in size.

• -The Culberson Solar Farm located on approximately five acres which is composed of more than 3,400 solar panels.

• -The Holiness Solar Farm which consists of 4,242 solar panels and is located on approximately nine acres.

A lead engineer and other O&M technicians will utilize ESA’s proprietary monitoring system which has been installed on each solar array to ensure maximum performance, reduce system downtime, and make informed decisions as to O&M services. ESA’s employees are also factory authorized and qualified to install and service advanced energy’s inverters which were used in the initial construction of the solar farm.

“ESA is proud to have designed and engineered a renewable energy technology that is an ideal O&M solution to maximizing energy generation,” Jeffrey Burkett, president of ESA Renewables. “We look forward to integrating our technology on many other renewable energy power plants in the near future for effective monitoring and control.”

A Federal District Court judge in Fresno, California has sided with America’s ethanol industry in ruling that the State of California’s Low Carbon Fuel Standard (LCFS) violates the Commerce Clause of the U.S. Constitution and is therefore unconstitutional.

In a joint statement, Renewable Fuels Association President and CEO Bob Dinneen and Growth Energy CEO Tom Buis said: “The state of California overreached in creating its low carbon fuel standard by making it unconstitutionally punitive for farmers and ethanol producers outside of the state’s border. With this ruling, it is our hope that the California regulators will come back to the table to work on a thoughtful, fair, and ultimately achievable strategy for improving our environment by incenting the growth and evolution of American renewable fuels.”

On this claim the Court found that the LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extraterritorial conduct. As a result, the Court issued an injunction. Judge O’Neill also ruled that CARB failed to establish that there are no alternative methods to advance its goals of reducing GHG emissions to combat global warming.

The ruling allows California to immediately appeal the decision to the U.S. Court of Appeals for the 9th Circuit and the ethanol industry is prepared to defend the decision that the LCFS is unconstitutional in any appeal that may be filed.

Nearly 108 million gallons of biomass-based diesel were sold during the month of November, continuing a record year of production, according to figures released by the EPA. Biodiesel makes up the vast majority of the EPA’s biomass-based diesel category under the Renewable Fuel Standard program, representing about 95 percent of the volume this year.
In a news release from the National Biodiesel Board, biodiesel production specifically had reached an all-time high 908 million gallons through the end of November. The previous annual record for biodiesel production was 690 million gallons in 2008.

Biodiesel is produced in nearly every state in the country and is on pace to support more than 39,000 U.S. jobs in 2011 while replacing roughly 1 billion gallons of petroleum diesel. Made from an increasingly diverse mix of resources such as agricultural oils, recycled cooking oil and animal fats, it is the first and only commercial-scale fuel produced across the U.S. to meet the EPA’s definition as an advanced biofuel. Biodiesel can be used in existing diesel engines and meets strict specifications of ASTM D6751.

GROWMARK and FS Energy have given a whole new meaning to energy efficiency with the wireless Energy Business System (wEBS) which has streamlined their fuel delivery system.

GROWMARK Information Management Solutions director Keith Milburn says wEBS was developed as a fuel billing solution that makes the record keeping process easier by providing instantaneous information such as fuel type, tank sizes, taxes and credits.

Milburn says they developed wEBS when the fuel business started to get more complicated a few years ago. “We no longer just handle gasoline and diesel,” he said. “We have high sulfur, low sulfur, bio or soy diesel, ethanol blends – and all the relevant taxes have made it very complicated given those combination of blends.”

“There’s two components of wEBS,” Milburn says. “There’s the back office or centralized data set and then the hand held on the truck level.” The back office includes not only customer information, but every tank that each delivery truck services. “The system identifies each tank with a bar code that tells who the customer is, what product types, relevant taxes, discounts, and if there have fuel contracted at a certain price,” Milburn explains. So all the delivery driver has to do is pump the fuel and within minutes the transaction is recorded and an email confirmation is sent to the customer.

Milburn says this “evolution in the energy business” was first introduced as a pilot program in January 2010 with two trucks and it has since grown to incorporate about 95 trucks that essentially function as mobile hot spots to communicate information. And he says the system is continuing to evolve with the technology.

Find out more about the wEBS system in this interview with Keith Milburn here: Keith Milburn Interview

Cellulosic ethanol continues to be out of reach for commercial use, according to the latest Renewable Fuels Standard (RFS2) requirements set by the Environmental Protection Agency for 2012.

“EPA has essentially reduced the mandate for cellulosic, recognizing the fact that there aren’t supplies out there to meet it,” said USDA chief economist Joe Glauber.

Back in 2007, Congress set a goal of 500 million gallons of cellulosic ethanol to be produced in 2012, but only a very small fraction of that is now expected to come to fruition with a target of just 8.65 million gallons. “The big question that’s been out there for years is ‘when will cellulosic ethanol become profitable?’ said Glauber. “I don’t think anyone sees that coming anytime soon, although a few of these plants are expected to come on line in the coming year, so we’ll see.”

In order to project cellulosic biofuel production for 2012, EPA tracked the progress of over 100 biofuel production facilities, the methodology of which is clearly outlined in the official 97-page final rule document. Companies that EPA determined were likely to produce significant quantities of cellulosic biofuel in 2012 include (with projected ethanol-equivalent gallons):

KiOR – a Mississippi-based renewable crude oil project (4.8 million)
INEOS Bio of Vero Beach – waste to biofuel (3 million)
Fiberight – a waste-to-biofuel project in Blairstown, IA (2 million)
American Process, KL Energy and ZeaChem for a total of less than a million gallons combined.

EPA noted the importance of setting a cellulosic standard that was realistic, yet still encouraged investment in the technology. “Thus while any standard we set for cellulosic biofuel standard for 2012 will have some uncertainty in terms of actual attainment, our intention is to balance such uncertainty with the objective of promoting growth in the industry.”

EPA has set the “advanced biofuels” target for 2012 at 2 billion gallons, much of that being comprised of imported sugarcane ethanol from Brazil.

Read EPA’s full explanation of the RFS2 requirements justification.

It looks like beef wins in our latest ZimmPoll. We asked the question, “What is your Christmas/Holiday dinner entree?” Beef got 34% of the vote followed by Pork – Ham/Other cut at 27%, then Turkey at 24%, then Lobster and Wild game each got 7% and Fish at 1%. I guess you normally only have one at a time but I like them all!

Our new ZimmPoll is now live. We’re asking the question, “What do you think is biggest ag story of 2011?” There were a lot of big ag stories so we had to pick a few that stood out for us. Let us know what you think.

ZimmPoll is sponsored by Rhea+Kaiser, a full-service advertising/public relations agency.

Fuel cells can create electricity that produces very little or even no pollution. In the future, fuel cells are expected to power electric vehicles and replace batteries, among other things. However, fuel cells are expensive.

Now researchers at Aalto University in Finland have developed a new and significantly cheaper method of manufacturing fuel cells. Using atomic layer deposition (ALD), the researchers are making cells that incorporate 60 percent less catalyst material than would normally be required. The study is published in the Journal of Physical Chemistry.

“This is a significant discovery, because researchers have not been able to achieve savings of this magnitude before with materials that are commercially available,” says Docent Tanja Kallio of Aalto University.

In a fuel cell, chemical processes must be sped up by using a catalyst. The high price of catalysts is one of the biggest hurdles to the wide adoption of fuel cells at the moment.

The most commonly used fuel cells cover anode with expensive noble metal powder which reacts well with the fuel. By using the Aalto University researchers’ ALD method, this cover can be much thinner and more even than before which lowers costs and increases quality.

With this study, researchers are developing better alcohol fuel cells using methanol or ethanol as their fuel. It is easier to handle and store alcohols than commonly used hydrogen. In alcohol fuel cells, it is also possible to use palladium as a catalyst. The most common catalyst for hydrogen fuel cells is platinum, which is twice as expensive as palladium. This means that alcohol fuel cells and palladium will bring a more economical product to the market.

These results are based on preliminary testing with fuel cell anodes using a palladium catalyst. Commercial production could start in five to ten years.

Iowa’s ethanol production increased slightly this year; however, the rate of annual growth slowed as the domestic E10 market became saturated, according to the Iowa Renewable Fuels Association.

Iowa has 41 ethanol refineries that produced 3.7 billion gallons in 2011, up from 3.5 billion gallons in 2010.  This represents 27 percent of the estimated 13.8 billion gallons of nationwide ethanol production.

“2011 was certainly a good year for Iowa ethanol producers with increased production and profitability,” said IRFA Executive Director Monte Shaw. “However, we relied on export markets for growth. We’re also facing the expiration of ethanol’s tax credit. Those factors place a premium on pushing the rapid commercialization of E15. Higher blends like E15 are the only way to guarantee increased ethanol production in the future and the jobs and foreign oil displacement that comes with it. We are waiting for final federal approvals, but Iowa will be a leader in E15.”

The National Biodiesel Board is pleased with the increase in biomass-based diesel requirements for 2012 under the Renewable Fuel Standard (RFS2) finalized today by the Environmental Protection Agency (EPA).

The 2012 rule raises the Biomass-based Diesel program to 1 billion gallons, up from 800 million gallons this year. According to the latest EPA figures, the biodiesel industry had produced some 908 million gallons through the end of November, exceeding the 2011 requirement with one month of production remaining.

Steckel also urged the administration to issue a final rule for 2013 volumes raising the Biomass-based Diesel requirement to 1.28 billion gallons, as the EPA proposed earlier this year. The EPA on Tuesday postponed finalizing the 2013 volume, saying it needs more time for review.

Biodiesel makes up the vast majority of the Biomass-based Diesel program under the RFS. Because it also qualifies as an advanced biofuel under the program – with greenhouse gas emission reductions of 57 percent to 86 percent – biodiesel is also eligible to help meet general advanced biofuels requirements under the program.

After nearly a month delay, the Environmental Protection Agency (EPA) today released final Renewable Fuel Standard (RFS2) requirements for 2012.

The final 2012 overall volumes and standards are:

Biomass-based diesel (1.0 billion gallons; 0.91 percent)
Advanced biofuels (2.0 billion gallons; 1.21 percent)
Cellulosic biofuels (8.65 million gallons; 0.006 percent)
Total renewable fuels (15.2 billion gallons; 9.23 percent)

The percentage standards for four fuel categories are required by the Energy Independence and Security Act of 2007 (EISA).

Ethanol industry developments in 2011 have set the stage for a new era. The Renewable Fuels Association has identified five top stories for the ethanol world from 2011 that will change the future.

They are:

1. EPA approval of 15 percent ethanol for use in 2001 and newer vehicles
2. The end of the blenders tax credit and secondary tariff on ethanol imports
3. Surge in U.S. ethanol exports
4. New strides in advanced and cellulosic ethanol development
5. Emergence of the integrated biorefinery model

In this edition of “The Ethanol Report,” Renewable Fuels Association president and CEO Bob Dinneen comments on the year in review and some of the top ethanol stories of 2011.

Listen to or download the Ethanol Report here: Ethanol Report on 2011 in Review

Biodiesel consulting firm Lee Enterprises of Little Rock, Ark., has announced plans for expansion in 2012 into ethanol, biomass, wind, solar and geothermal, and the addition of consultants and strategic partners.

“We are currently the world’s largest biodiesel consulting group, and most of our consultants and strategic partners are already very involved in the other alternative fuels,” said principal owner Wayne Lee.

Lee notes that the group’s current appraiser, environmental expert, QA experts, and grant writers have backgrounds and experience in these areas, and that the group’s larger strategic partners – Stoel Rives (legal), Christianson & Associates (accounting), IMA of Kansas (insurance), FCStone Merchant Services (feedstock financing), and Executive Leadership Solutions (staffing) – already have very significant presences in these other alternative fuels sectors. “Our goal over the past several years has been to put together a top notch team of the best biodiesel experts in the world”, says Lee. “I am quite satisfied that we have accomplished that goal and now address almost every need in the biodiesel sector.”

“I am a firm believer in biodiesel as the best alternative to diesel fuels and I strongly believe in its future” says Lee. “But, the overall solution to the world’s oil dependency rests with all the alternative fuels working together”. As a result, Lee wants his consulting group to be able to provide the same depth of assistance for all kinds of alternative fuels as they currently provide for biodiesel.

The U.S. Postal Service may be in the red but they’ve been promoting going green this holiday season.

“The Postal Service is one of the greenest mailing and shipping companies in the world,” said Thomas G. Day, chief sustainability officer. The eco-friendly options offered by USPS include mailing and shipping supplies, free package pickup and holiday cards printed on recycled paper available in 2,000 Post Offices.

“We have a ‘fleet of feet’ delivering mail the greenest way possible, by walking,” Day added. “Nearly 9,000 of our carriers will be delivering holiday mail on foot this season. And we also have nearly 80,000 ‘park and loop’ routes, where carriers will drive vehicles from the Post Office to neighborhoods and then deliver those holiday packages and cards on foot.”

The Postal Service will have delivered a total of 16.5 billion cards, letters and packages between Thanksgiving and Christmas Eve using various alternative fuel vehicles in the largest civilian fleet in the world of 215,000 vehicles. Alternatives utilized by USPS include three-wheeled electric vehicles with zero gas emissions that operate at a cost of only 2 cents a mile, as well as vehicles that can operate on compressed natural gas, propane, ethanol, and fuel cell. There’s also 30 large all-electric trucks delivering holiday mail in Manhattan.